Are "deposit insurance" instead of security deposit companies legit?
The programs where tenants pay a smaller amount/fee to "guarantee" a security deposit? The ones where tenants buy "insurance" (if that's what it's called) instead of paying a deposit?
I'm not sure what these programs are called. I remember the idea of them being where tenants have to pay less upfront and pay a fee to this service instead of a security deposit. If the landlord makes the claim, they still get the full amount of what the security deposit would have been.
That seems like a terrible deal for the insurance company. The policy would have to be loaded with exclusions and limitations. Otherwise, the tenant would have no incentive to leave the place in decent shape and landlords would try to rehab units using claims against the policy.
Like you, I do not understand the business case ... unless the premiums were very stiff! In which case, it would be cheaper for the tenant to pay the deposit.